History keeps going in circles. Adam Smith had said US should not get into industrialization. But Hamilton as the first Treasury secretary went against Smith and proposed industrialization. Infact, Hamilton actually tried to shape US like Europe based on his tour of the continent.
With the ongoing Europe mess, the continent is searching for its own Hamilton. Earlier Prof Harold James had suggested Europe to search for its Hamilton and now Prof. Sylvester Eijffinger of Tilburg University makes the case:
The ECB is under fire from all sides for its inability to stimulate Europe’s economies. This column puts the case for an informal European ‘praesidium’ within the Eurogroup to coordinate wider stimulus and reform measures. This will inevitably lead to the appointment of a European finance minister – the Eurozone’s equivalent of Alexander Hamilton, the first Treasury Secretary in the history of the US.
It goes through similar arguments made in the past as well.
In all these discussions, we hardly read any research on lessons from Sardar Patel who integrated India despite all odds. Patel is mostly called as Bismarck of India but the comparison is hardly apt. What Patel did was much more and far more complex. But we seem to love these tags which connect our leaders to some western leader no matter the context and scale of operations.
In this we are ourselves to be blamed. We have just played our integration story in a superficial manner. Older generations atleast knew much but current is mostly clueless on these matters. Even knowing that so many princely states were made part of the Union is seen as enough.
The story could be given a different spin to appeal to today’s audience especially on the economic front. How did fiscal and monetary union happen as these princely states ran variety of policies. Some just did as British said and some others were more independent to do their bit. These latter ones opened their state banks which were like central banks for their provinces. These State Banks were later called as SBI Associate Banks and now being merged with SBI. How did the transition from their state banks to RBI happen?
Likewise, most princely states would be doing their own fiscal policy as well. Infact they could be having more control over fiscal policy than monetary policy. There is little clarity over these matters. It is fascinating to read how India and Pakistan seperated their monetary union in RBI’s first history volume. This itself could be spun into if Euro does away with its union, what lessons can be learnt from India-Pakistan union?
So Sardar Patel and team not just got this political integration but even the economic integration as well. There is some clarity on political side but very little on the economic side.
Much of India’s economic history is about how little we have achieved. It is the usual stuff on how we were 25% of world economy till British came in. An since then we became more and more insignificant in world affairs till 1991 came and changed everything.
But there are areas where we achieved quite a bit. This political and economic integration exercise is as big an achievement as any. To see how it has stuck despite so many stalwarts warning it will break-down is a huge testimony of the achievement. Just that we don’t tell the story enough in as many ways as possible.
Infact who knows, we could have very different set of people who are unknown who stitched these ideas. Sardar Patel could have played a minor role on these very matters. It is actually not the individuals that matter but the ideas that were generated in the process.
There is a lot to learn and figure in Indian economy than just the usual stuff…